Ashok Leyland shares were on the climb on Monday as brokerages jacked up ratings on the stock on a strong Q4 earnings showing while the group’s Chairman said the firm is set to launch vehicles in each fuel type in the next two years.

What Happened: The firm is planning launches for all alternate fuels within 18 to 24 months, though large-scale deployment could take longer, Dheeraj Hinduja said in an interview with CNBC-TV18.

He added that he views electric vehicles (EVs) as ideal for short distances, while hydrogen is better suited for long hauls, but infrastructure and costs are hurdles.

In the fourth quarter, Ashok Leyland’s net profit grew 20% year on year to ₹900 crore, although revenue from operations dipped 3% to ₹11,266 crore.

Analyst Views: Analysts were largely bullish on the stock following results, seeing no roadblocks for demand.

Motilal Oswal expects a CV demand recovery from the second half of FY25, driven by strong structural demand. It raised its FY25 and FY26 earnings per share estimates (EPS) by 7% and 6%, respectively, and reiterated a “buy” rating with a target price of ₹245.

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Brokerage Emkay upgraded Ashok Leyland to “buy” from “sell” and raised the target price to ₹250, citing upcycle potential from FY26. The brokerage expects positive momentum in the commercial vehicle (CV) cycle from FY26, driven by sustained pricing power and margin expansion, projecting a 19% increase in FY26 EPS.

Nuvama increased its FY25 and FY26 EBITDA estimates by 5% and 4%, respectively, due to better pricing and margins. Nuvama maintained a “reduce” rating but raised the target price to ₹180 from ₹168.

Axis Securities said Ashok Leyland is focused on gaining market share by improving its India presence and investing in product development and diverse powertrain technologies. Further, optimising operational efficiencies, material cost reduction efforts and pricing discipline are expected to generate strong positive cash flows, the brokerage added. It hiked its target price on the stock to ₹222 from ₹180 with a “hold” rating.

ICICI Securities took a cautious stance on the stock, saying investors will need to monitor CV volume demand going forward. It held its “sell” rating on the stock and a target price of ₹140.

Price Action: Ashok Leyland’s share price was up 5.98% at ₹223.30 in afternoon trade on Monday.

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